Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, sold 2.2 million vehicles for the quarter, an improvement of 42,000 vehicles on-year.

Toyota and Mazda Motor Corp. are set to announce later Friday a partnership, according to a source familiar with the matter. The deal is expected to involve a joint-venture auto manufacturing plant in the U.S., working together on green technology and a capital alliance.

Toyota raised its fiscal full year profit forecast through March 2018 to 1.75 trillion yen ($16 billion), higher than its earlier forecast of 1.5 trillion yen ($14 billion).

Like other Japanese exporters, Toyota is enjoying the benefits of a yen that has stayed cheaper than previously expected. But the revised forecast is still lower than the 1.8 trillion yen earned in the previous fiscal year.

Toyota, which has been vying against the Japan-France alliance of Nissan-Renault, Volkswagen AG of Germany and U.S. manufacturer General Motors Co. for the spot of world's No. 1 automaker, stuck to its earlier projection for global vehicle sales for the fiscal year at 10.25 million vehicles.